Question

In each of the following cases, indicate whether it would be appropriate for an FI to buy or sell a forward contract to hedge the appropriate risk. a. A commercial bank plans to issue CDs in three months. b. An insurance company plans to buy bonds in two months. c. A thrift is going to sell Treasury securities next month. d. A U. S. bank lends to a French company; the loan is payable in euros. e. A mutual fund plans to sell its holding of stock in a Ger-man company. f. A finance company has assets with a duration of 6 years and liabilities with a duration of 13 years.